Frugal ConfessionsLive a VIP Life on an Average Paycheck2015-08-02T10:19:16Zhttp://www.frugalconfessions.com/feed/atomWordPressAmandahttp://www.frugalconfessions.comhttp://www.frugalconfessions.com/?p=67172015-07-14T09:49:08Z2015-07-27T09:00:01ZI had two reasons for writing this flood insurance series (here is Part I, and here is Part II) in the aftermath of the Houston Memorial Day floods. The first was to determine whether or not our own flood insurance policy would have been adequate — since we were just blocks from having to use […]

I had two reasons for writing this flood insurance series (here is Part I, and here is Part II) in the aftermath of the Houston Memorial Day floods. The first was to determine whether or not our own flood insurance policy would have been adequate — since we were just blocks from having to use it — and the second was to prepare you for the real financial implications of a disaster (the kind that can get lost in policies and regulations).

So let’s bring this series home with an assessment of our own coverage + a bit more info for how to get your own flood policy (knocking on wood — times 10 — plus I’ll pick up a heads-up penny in hopes that you never have to use it).

Details of Our Personal Flood Insurance Policy

You can bet I took a triple look at our policy after digging into the aftermath of all of this. I mean, how would we have fared had our home been just three stop signs closer to our bayou?

Policy Coverage: The coverage for our building is up to $75,000, and coverage for our contents is up to $30,000.

Policy Type: It’s a Preferred Risk Policy, meaning we are in a moderate-to-low-risk area.

Cost of Maximum Coverage for Us: The maximum that we can get is $250,000 for buildings, and $100,000 for contents.

How We Would Have Fared

Before we go into an assessment, I wanted to address insurance in general.

I was contacted by an insurance agent (she wishes to remain anonymous) who brought up a great point. “Insurance is NEVER intended to take care of a policyholder 100%. The homeowner will always incur costs. Insurance is a risk SHARING tool. An insurance company agrees to SHARE YOUR RISK. But that doesn’t absolve the homeowner’s / policyholders from understanding their coverage, and having money in savings to cover their deductibles and their share of the loss. It gets a heavy burden when everyone blames the insurance company because they weren’t prepared.”

The 50% Rule Wouldn’t Apply to Us: We live in a moderate-to-low-risk area, so from what I’ve read, the 50% rule where if your home is damaged beyond 50% of its appraised value it has to have substantial work done (like elevation), would not have applied to us. This is a good thing, as the cost of doing so would likely have been more than our maximum coverage amount on the building.

The 80% Rule Would’ve Dinged Us: Our home Replacement Cost Value was determined at $259,500, and we only have it insured to $75,000. Interestingly, our home cost us $165,000, so I’d have to do some research into why the replacement cost is so high. Hmmm…

We Would Still Owe to Our Mortgage Company If We Wanted Out: Let’s say the damage was so great, or we were so emotionally devastated, that we wanted to just wash our hands of it all and move. Since we still owe around $120,000 on our mortgage, and our maximum insurance claim we could receive on our building is $75,000, signing over that check means we would still owe roughly $45,000. Best-case scenario for us at that point — if we don’t want to drain our savings and walk away underwater, literally, after six years of paying on a mortgage — would be to sell our home to someone in the hopes of getting an offer high enough to pay the additional $45,000 off of the mortgage plus recouping the roughly $45,000 in equity we have paid into our home. As to whether or not we could find a buyer to do this with a flooded home…I’m really not sure.

Decision Time

So, after all of this info and experience, I’ve got two questions for you:

If you already have a flood insurance policy, do you feel good about the amount you have?

And if you don’t have one, do you think it’s time that you purchase one?

You should know that everyone lives in a flood zone – it’s just a question of whether you live in a low, moderate, or high risk one.

Of course, whether or not you choose to get coverage (a choice you have as long as you’re not in a floodplain) is completely up to you. If you wish to do so, you can get an estimate on coverage costs for your personal home by filling out the flood risk profile box on the right hand side of this page (our estimate came out as moderate-to-low risk, with estimated coverage costs of $44-$266 for content only and $137-$452 for building and contents — completely accurate with what we are paying, though the range is a bit big).

To give you an idea of how expensive it could get if you were in a floodplain, Pat’s mandatory coverage costs her $1,757 each year. Another friend of mine who is in a floodplain pays around $900/year.

Remember, there is a 30-day waiting period for most policies to go into effect, so if you wait to purchase a policy until you hear on the news about a tropical development, it might be too late.

As for us, if there’s one thing I’ve learned, it’s that flood damage is incredibly expensive to fix.Tweet this! This project, along with driving up and down the streets of debris-filled streets and flooded homes, has been eye-opening. We will likely be increasing our policy limits at renewal time. Perhaps not up to the $250,000 limit, but at least enough so that we are covering 80% of the replacement cost of our home.

And dealing with financial catastrophe while in the muck of emotional upheaval is something I’d rather not have to do.

]]>2Amandahttp://www.frugalconfessions.comhttp://www.frugalconfessions.com/?p=67152015-07-20T14:08:39Z2015-07-20T09:00:06ZOkay. So you’ve got a flood insurance policy, you’ve flooded, and you set into motion the claims process (check out Part I of this series if you need to review any of that). Now what? Here’s where things might start to get interesting. Not necessarily in a studying- the-Mona-Lisa way, but more so in a […]

Here’s where things might start to get interesting. Not necessarily in a studying- the-Mona-Lisa way, but more so in a navigating-retirement-account-withdrawal-rate kind of way.

Most of this you’re not likely to find in the policy itself, at least not in plain English.

This is the type of stuff that lands in your lap after the disaster actually hits and you’re rain-boot-deep in paperwork trying to sort your life out.

So let’s go over some of the sticky issues people can face after their home has been flooded.

Secure Temporary Housing

You have to remember that if you flood, chances are good many of your neighbors did as well. And many homes will become hazardous to live in. Some people can live with their relatives, while many others will need to relocate to apartments. We all know that an increase in demand leads to an increase in price, which means that any money you receive as rent/house assistance from FEMA or elsewhere is likely not going to go as far as it could have pre-flood. For example, Pat was able to find a place to rent just four minutes from her home. However, the monthly cost is $1,900, and I’ve been told by others that the housing assistance offered by FEMA is $721/month.

There are limitations, both financial and geographical, to this lifeline as well. Leonor Rouse stayed with family and friends, and said that the TSA locations offered were pretty far from her area. She received rental assistance for two months, but will be ineligible for more because “…our rental and mortgage is below 30 percent of our income.” Ultimately, she was “…forced to get a one year rental since short term rentals are not in our price range in the area.”

Leonor’s situation brings up another great point: unless you’ve managed to pay off your mortgage, your mortgage company still expects you to pay your monthly mortgage + escrow whether you’re living in your home or not.

Pay Your Deductible

Most policies come with a $1,000 deductible on the building, and a $1,000 deductible on the contents (some newer policies have $1,250 for each). Hopefully you’ve got this stashed in an emergency fund somewhere earning that <1% (oh, for the days of 5% interest on savings accounts…).

Wait to Make Any Decisions Until it’s Determined if You Meet The Dreaded 50% Rule

This one’s a biggie that has caught many homeowners by surprise (myself included). Leonor says, “[m]ore than anything I wish I had known about the 50 percent substantially damaged and improved constraint to force an owner to comply with elevation requirements. I would not have purchased the property had I known.”

FEMA has a rule (here’s the plain English explanation) that if your home is in a flood hazard area, and is damaged at 50% or more of its appraised value, then you have to jump through a whole lot of hoops to move forward after flooding. As in, you have to elevate your home to a certain level, as well as bring it into compliance with the current building codes in your flood zone. Your options become either to elevate (very costly; one man told me he was quoted $125,000 to get the elevation he needs; others have said that companies will not elevate over a certain footage, forcing them to pick one of the other options), relocate, demolish, or floodproof.

So if you are around 50% of damage, then it is probably in your best interest to get a private appraisal done on your home, as this will give you more leeway to get under that 50% threshold. You would do this through a “Substantial Damage Determination Appeal”.

Also, your flood insurance policy includes $30,000 for an Increased Cost of Compliance if you are at 50% or higher damage. However, this is still within those $250,000/$100,000 limits. So if you maxed out that $250,000 on your claim, then you cannot get more money to help with the cost of compliance.

Note: the other reason to hold off on decision-making until you decide this point is because you could throw away good money. For example, you don’t want to start an expensive remediation process only to find out halfway through that you have to demolish your home.

Brace Yourself for The 80% Rule

On top of bracing yourself for an Actual Cash Value (ACV) assessment of your personal property items rather than replacement costs (so you might get $100 for a couch instead of the $500 it will cost to buy a new one), you might be in for an even worse surprise.

As explained to me by an insurance agent who wishes to remain anonymous, “You must insure your home for either 80% of its replacement cost or $250K maximum coverage, whichever is less in order to receive the full ACV of your damages. For example, if you have a $500K home, 80% is $400K. So therefore you must carry the $250K limit. If you do not insure your home for at least 80% of its replacement cost, then your damages will be pro-rated by the percentage of coverage you carried.”

So that $100 for your couch could come in at even less if your percentages are off.

Decide if You’ll Get Your Own Quotes to Account for Your Adjuster’s Shortfalls

Your adjuster uses the software Simsol when they determine what it’s going to cost for your home to be restored. This database does not account for the locally inflated labor + supply costs you’re going to come across from everyone needing the same, suddenly-more-precious-than-gold, construction materials.

One drive down my street, and you’ll see no less than four handwritten signs promising black-market supplies of unlimited sheetrock materials, for example. This is why Mostyn Law firm suggests (and to be honest, what several adjusters suggested to homeowners “off-the-record”) that you get your own quotes as they will likely be 10-20% higher (re: more realistic) than what your adjuster can do for you.

You’re probably starting to see just how expensive getting a home repaired post-flood can be, especially if an adjuster has been out to your property and you’ve learned the financial limits of your policy.

Chances are you will need to pay for substantial chunks out of your own pocket to do so. The Small Business Administration offers Disaster Loans at low interest rates to help with costs post-flood. Some homeowners need to turn to these because they simply can’t hold out for what, if any, grants get approved to help with the substantial costs of things like elevating homes.

The conundrum? One man I spoke with told me that if you apply and receive an SBA loan, then you will be ineligible for a grant if one gets approved later on.

“Unfortunately, the gentleman you spoke with is correct. Federal law prohibits a homeowner from receiving federal assistance after a disaster from more than one source. If someone takes out an SBA loan now, they will be ineligible for grant assistance should it become available down the road. This has put many homeowners in a bind in regards to what they should do,” says Catherine Dunn, the district director for Texas State Representative Sarah Davis.

So how long might you have to wait (and by wait, I mean potentially pay rent on top of a mortgage for a home you may not be able to live in)? According to Catherine, FEMA Flood Mitigation grants and Hazard Mitigation grants showed up 3-6 months after Hurricane Sandy to the state of New Jersey, and the average turnaround time, if there will be funds, is 8 months.

…Or, Decide if You’d Like to Take Advantage of the Flippers Roaming Your Streets

You can’t blame people for trying to capitalize on an opportunity, especially when doing so may relieve a flood-devastated homeowner with the option to walk away.

However, be very wary of what you’re being offered and communicate with your neighbors. I sat next to a man at the law firm meeting, and he told me he had received an offer on his home that was in line with true market value. And he took it. He was a happy customer (perhaps not ‘happy’, as having to walk away from his home before he was ready is quite an emotional thing, but certainly he felt like he had a pitcher of lemonade from a bowlful of lemons).

However, he spoke with another neighbor who received an offer that was a whopping $110,000 less than his. He was quickly able to communicate with her — as she only had 48 hours to accept/deny the offer, for whatever reason — that she was getting a raw deal.

A disaster is not the time to withhold precious information from your neighbors, and you’ll likely benefit from being able to air some of your emotions anyway, so strike up that conversation.

Be Prepared for Who Gets Your Insurance Claim Check

If you own your home outright, then you will get the insurance claim check.

And if you don’t own your home outright? Any insurance check will likely be made out to you + your mortgage company. It’s the mortgage company who wants to make sure you get the repairs done or pay off the mortgage and they’ll send you any leftover from that check for doing so.

In Part III of this series, we’ll look at our personal flood insurance policy to determine how we would have fared just a few blocks away, as well as detail how you and your family can better prepare for a flood in the future.

]]>2Amandahttp://www.frugalconfessions.comhttp://www.frugalconfessions.com/?p=67132015-07-15T07:19:47Z2015-07-13T09:00:54ZWe’ve got a flood insurance policy. It’s a no-brainer purchase we renew without thought year after year. Kind of like auto insurance. I mean, when you figure out that your city’s highest point above sea level is a measly 50 feet, and that flood damage is excluded from standard homeowner’s insurance coverage… But to be […]

We’ve got a flood insurance policy. It’s a no-brainer purchase we renew without thought year after year.

Kind of like auto insurance.

I mean, when you figure out that your city’s highest point above sea level is a measly 50 feet, and that flood damage is excluded from standard homeowner’s insurance coverage…

But to be honest, I haven’t really looked at our policy in the last five years of homeownership. The renewal paperwork comes in the mail, we stick with the middle-of-the-road $281 option (note: we’re not located in a floodplain — just a few blocks away — which makes our plan option costs much lower), and so it goes.

Except here’s the thing: remember those Memorial Day floods you watched on the news (or experienced firsthand) in Houston? Well, our home was just a few blocks away along the same bayou that swept anywhere from 1′-4′ of water right through peoples’ front doors.

Note: Okay, you don’t live in a floodplain and walking up your long, winding driveway can give you a nosebleed. Well guess what else causes a significant amount of flood damage in the US? Hurricanes, winter storms, and snowmelt. And according to the National Flood Insurance Program, all 50 states have experienced floods or flash floods in the last 5 years. So please keep reading.

Bayou Flooding a Mere Two Stop Signs from Our Home

I was in PA for my brother’s wedding during the actual flooding, and my husband was home. He hadn’t prepared me for what I was going to see when I flew in a week later:

Emergency response crews camped out in our local shopping center, a Red Cross team scouting the area, dumpsters lined up in people’s front yards, debris piles stacked taller than myself as homeowners started the arduous task of ripping out what used to be their walls to attempt to stop Houston’s notoriously humid summers from re-plastering them with mold…

We were mighty close to dealing with disaster ourselves — so close, in fact, that our address has been cleared for Federal Disaster Assistance money — and feel blessed that we did not have to.

In the weeks following the flooding, I threw myself into all things flood. I joined a Houston Flood Facebook Group, and instead of rummaging through my friend’s feeds, I read through victims’ stories, questions, and information posted. I attended a really informational community meeting held by Mostyn Law firm where I met several people who have been severely affected (past tense doesn’t seem appropriate, as it’s going to take these guys a long time to get things back on track). And I interviewed several more.

What I needed and wanted to do was to better understand the financial implications of a flood for the more than 4,000 neighbors of mine currently dealing with the aftermath, least of which is having to submit their first claims against their flood insurance policies (despite several having lived in the same home, flood-free, for the last 50 or so years).

I was looking for the financial and personal aftermath, not just the 2-minute sound clip found on the news before moving onto the next national disaster.

I mean, what happens to the people whose lives have been turned upside down? How are they getting by? What’s it like to submit a claim for flood insurance?

And *gulp* would our own flood insurance policy have been enough to get us back on our feet if we had been affected?

What is Flood Insurance?

Most private insurance companies do not offer flood insurance. This is because of something called Adverse Selection, where people who are going to use this type of insurance are likely the only ones who will buy it. So it would bankrupt companies.

Yes, you may be able to find private flood insurance policies (and some people get private as a supplement to their federal program coverage). But generally speaking, the majority of people with flood insurance find a policy through the National Flood Insurance Program (NFIP). It’s a federally-backed insurance sold through private insurance companies but managed by the Federal Emergency Management Agency (FEMA).

Big Differences Between Flood Insurance and Homeowner’s Insurance

I met Patricia Burns Merritt (Pat) in one of the Facebook Groups I joined. She’s lived in our neighborhood for a long time, and has had to put in one claim on her Homeowner’s Insurance and now one claim on her Flood Insurance in the 51 years she’s been in her Houston home.

Her experience with submitting a claim to each sheds light on some of the differences between these two types of insurances. “Not really a surprise, but flood insurance does not pay for packing, storage or relocation expenses. About 21 years ago we had an electrical fire and had to move out while everything was removed and ozoned for smoke damage. My homeowners insurance paid for everything, including a rental house, mileage, food, packing and unpacking and the two moves to and from the rental. I didn’t have to do a thing but point to what I wanted moved to the rental. That took the sting out of an otherwise miserable three months.”

Here are some other specific differences between the two:

Unlike homeowners’ policies, flood policies do not pay temporary relocation costs, such as hotels or apartments (this does not mean that you cannot get assistance in a declared disaster area–see below).

Flood policies do not pay for damage in a basement, other than to the heating, air conditioning and water systems.

Flood policies generally only pay for the Actual Cash Value of damaged personal property (so they deduct depreciation), rather than their replacement costs like a homeowner’s insurance does. Pat explained, “FEMA depreciates each item that does not have a RECENT APPRAISAL. We had appraisals on four items: piano, two rugs, a grandfather clock. They have to pay the appraised value. Everything else is depreciated.”

Process for Filing a Flood Insurance Claim (and What to Do If You Don’t have Flood Insurance)

And yet despite its limitations, having flood insurance is way better than not having it if you ever have to face a flooding disaster. Tweet this!

It’s helpful to understand the overall process of how to file a claim, specifically since various levels of support/aid from various levels of government can quickly get overwhelming.

If you have flood insurance, here’s what you do:

Call Your Insurance Agent to File a Claim: The flood insurance program is administered, regulated, and backed by the federal government (National Flood Insurance Program, or NFIP). However, policies are mainly sold through private agents. Whichever agency you have your flood insurance through, you need to call them. They are the ones you’ll be filing a claim with (unless you have a direct policy with FEMA; the majority of people have a policy through private insurers). Obtain a claim number. Also, notify them of your temporary/current address (as you may not be able to live in your home any longer and they’ll mail you time-sensitive items). When you submit your claim to your insurance agent, get something in writing from them that you submitted it + they received it (even an email).

Register with FEMA: Go to DisasterAssistance.gov and register with FEMA. This ensures you get any future grant help that may be available to you (on top of your flood insurance policy payout).

Work with Your Adjuster(s): There is your insurance adjuster, and then there is a FEMA adjuster. The first is for your flood insurance policy under NFIP, and the second is for any emergency aid. Depending on how big the disaster, there may be teams of adjusters coming in from across the country to deal with the floods. You don’t want to throw away your damaged items (if you can help it) before your adjuster sees them. If you must throw something away, document it with photographs, receipts, and whatever else you’ve got to show evidence of its value/existence. And Mostyn Law Firm suggests that you keep a paper trail with your adjuster by sending them a rundown of your discussions by email. This is in case your insurance company doesn’t agree with something down the road when your adjuster has likely moved onto the next disaster. Also a tip from Mostyn Law firm, if you don’t agree with the adjuster numbers on the proof of loss form, still sign it, but put a statement above your signature to the effect of, “I disagree with the amount; however I’m signing this so that I can get the money that’s there.”

Get Your Proof of Loss in Before the 60-Day Deadline: Your Proof of Loss — a form you sign and submit with the amount you’re requesting, supporting documentation, and a sworn statement by you of its accuracy — has to be filed by day 60 from the date of the flood. There can be extensions granted, such as here in Houston, where there was an extension granted for everyone with FEMA insurance (the extension does not include you if you have a private policy) for 240 days after the day of the flood. Note: this is not your claim with your insurance company. But it’s extremely important. An example of what one may look like is here.

So, are you totally screwed if you didn’t sign onto a flood insurance policy at least 30 days before a flood occurs (the length of time it usually takes for a policy to take effect)?

If you don’t have flood insurance, here’s what you do:

Register with FEMA: Go to DisasterAssistance.gov and register with FEMA. This ensures you get any future grant help that may be available to you. Disaster assistance is for losses not covered by insurance, and is only available in counties that have been declared as federal disasters. It should be noted that this type of assistance does not count as income. Lodging/hotel expenses may be eligible for reimbursement if the home was damaged to the extent you could not return for an extended period of time, so keep those hotel/motel receipts just in case. There is also Housing Assistance from FEMA, which has a Repair Assistance component, that you might be eligible for. “Housing assistance can include reimbursement for short term hotel expenses; money to rent a place to live for up to 18 months while your home is being repaired; money to repair damage to your home; or money to help you purchase a new home if your home is destroyed. Financial grants from FEMA are taxpayer funded and have a maximum fiscal year dollar amount which is tied to the year the disaster was declared.”

Contact Your Homeowner’s Insurance: Pat says that her homeowner’s insurance let her know her homeowner’s insurance covers nothing from this flood (she contacted them because her flood insurance is through them). However, FEMA says, “If you have Homeowner’s Insurance, you may want to contact your insurance company regarding Loss of Use or Additional Living Expenses (ALE) for evacuation purposes.” It is certainly worth it to call your homeowner’s insurance and see if they will cover anything at all (though don’t expect it).

Work with Any Inspectors: During the application review process, FEMA may call to schedule an inspection of your home.

Stay in the Know: Going to community meetings, and joining popup Facebook groups will get you information that could make a real difference to you. I’ve learned a wealth of information from the Facebook Group I joined, such as how people in our county can get an extension on filing taxes with the IRS, and can get an exemption on sales taxes paid to make repairs to their home.

Part 1 has been a rundown of what’s going on in my neck of the woods, as well as the basics behind your flood insurance policy. Tune in next week for Part II where we discuss some of the less-common, more colorful experiences of flood insurance policy claims.

]]>7Amandahttp://www.frugalconfessions.comhttp://www.frugalconfessions.com/?p=67062015-07-06T02:28:46Z2015-07-06T09:00:48ZJust the other week while at a coffee shop having a merrily productive morning (which doesn’t always happen with my preggo brain, I can assure you!), a young man in his 20s came in and sat next to me. He didn’t pay for a coffee or drink, but instead put in some ear buds to […]

He didn’t pay for a coffee or drink, but instead put in some ear buds to listen to music on his phone.

Because he didn’t act like a ‘normal’ customer, he made me nervous enough that I didn’t want to leave my laptop next to him to use the bathroom like I would normally do.

Total judgment on my part.

He left the coffee shop, then came back with a Lunchables bought from the grocery store around the corner.

And Then the Most Shocking Thing Occurred…

When he finished eating, he took out his ear buds, smiled, and asked if I’d like his Reese’s Cup. He said he didn’t want it.

I thanked him kindly, feeling bad at that point for my quick judgment of him.

The next day, eager to keep up that productivity I so crave lately, I went to a different coffee shop about 7 miles away from that one where I had met him.

Not one hour after I sit down to write, the same guy walks in and sits next to me.

Seriously.

I smile and acknowledge him, then continue on with my writing.

Except that this time the man sitting on my other side starts a conversation with this Reese’s-Cup-Giving-young man because he thinks this guy might also be Ethiopian (there’s a group of nice Ethiopian men who frequent this location who love to chat it up with one another).

During the course of this conversation that I couldn’t help but hear, this young man’s story unfolded.

Here’s the Rundown:

He is a homeless rapper.

He keeps in touch with his parents through his phone + free wifi at coffee shops.

He said he lives off of the kind blessings of others and that God is looking out for him.

Honestly, I was moved.

And if I’m going to be really honest, which I am, I was a bit ashamed of myself.

A homeless person, whom I had totally judged from the get-go, had thought generously enough to give ME something: a Reese’s Cup.

What had I done for him except pass judgment?

I Receive Two Gifts from this Young Man

The man next to me bought the young man a lunch and something to drink. He was truly grateful.

He sat down next to me and ate. Awhile later, I noticed he began to cry.

I reached out to him and asked if he wanted to talk about something, or if he just wanted to cry (which I told him was totally okay — I’m an introvert and understand sometimes just wanting to be alone with my emotions).

He thanked me.

So I told him that I was the girl yesterday who he had given his Reese’s to (he had completely forgotten), and that it had absolutely made my morning. I pulled out my wallet and had a $5 bill to give him. He said, “you don’t have to do that.”

I replied, “I know I don’t have to. I want to.”

Probably more than that, I gave him some encouragement, telling him it was touching that he had given me so much when he had so little.Tweet this!

He had offered me something with true generosity of heart. Such pure generosity, in fact, that it made me pause to reflect. It also gave me the chance to offer another person something out of pure generosity.

What a gift that he gave me…again.

Honestly, I was so moved by this whole thing that I felt the need to share it with you. Lots of emotions to work through. Probably the toughest being the realization that I have so much while others have so little, I worry too much when in reality God has and will continue to provide for me + my family in ways that blow me away, and that I need to be more generous to others because you just never know what their situation is.

]]>2Amandahttp://www.frugalconfessions.comhttp://www.frugalconfessions.com/?p=66462015-06-19T16:30:37Z2015-06-29T09:00:22ZLet’s face it: there are times when you feel less than abundant. Like… …after paying your rent/car/student loan and realizing you’ve got $139.88 until your next paycheck. …Or seeing an alarmingly substantial dip in savings after paying off a big debt, which technically should make you feel great except that you feel like you’re being […]

…Or seeing an alarmingly substantial dip in savings after paying off a big debt, which technically should make you feel great except that you feel like you’re being punished by that low balance.

…Or realizing that you work five days a week, commute crazy amounts without actually having put any money aside in your for-keeps accounts for the last year (“annnnnnd I’m working for what?!?“).

You don’t have to believe in any type of woo-woo money energy to know that when you make decisions from a place of stress and lack, they’re not the same kinds of decisions you would make when you feel abundant.

They’re the kind of decisions that could keep you in the loop of lack instead of ones that will ensure you don’t get back to this place again.

Sometimes those decisions are out of necessity, so no judgment here.

But I’d like to help you with feeling as abundant as possible during times of lack so that you can see the bigger picture, know you’ll get out of it, and make financial decisions that not only help in a pinch but further you + your goals ahead.

Examples of Decisions from a Place of Lack Versus a Place of Abundance

What do I mean about decisions from a place of lack versus from a place of abundance, and why does that make a difference to your future prospects?

Let me give you a few examples:

Setting Yourself Up to Miss the Sales Cycle Stock-up Price: In our household, my husband goes through certain items like crazy. Mustard and pickles come to mind. When these items hit the stock-up price, I should purchase 2-4 of them at once so that I will have enough to get me through until the price drops to its lowest again (usually around $1.00). But if I’m feeling lack and am tightening up the purse strings, then I will likely only purchase enough to get us by. Meaning in two weeks I’ll now have to purchase the product for about $0.50-$1.00 more (times 4, as that’s how many we would probably need on a typical 12-week sales cycle) than I otherwise would have paid.

Choosing the Higher-Costing Plan for the Phone: You’re dying to get that new Smartphone but haven’t saved up a penny for it. So when you see a two-year contract plan that gets it down to a price you can afford, instead of realizing (and holding off a bit longer) that for the next two years you’ll more than pay for the cost of the phone by the bloated plan costs, you go for it. Now you’re stuck in a plan that is bleeding your cash flow too much each month, making it more difficult for you to save up for that next new gadget upgrade two years from now.

Taking Social Security Too Early: The longer you hold out before starting your social security payments, the higher your monthly check will be. So if you start panicking about where the money’s going to come from in the gap years between retiring and your first social security check, you could be looking at a significantly smaller lump of money over the long-term (especially since people are living longer than ever before).

Moves to Make You Feel More Abundant while in the Muck of Lack

So how can you turn your mindset around to one of abundance (or at least one headed in that direction) rather than one of lack…especially when your bank account is hanging out on the lack side of the equation?

Make it Sparkle: Clean the house, clean your car, clean something. It’s free, it gives you a mood-boost, and it works.

Go Shopping…Seriously: Go to a thrift store with $10 and go shopping! Seeing how far your money can stretch can temporarily bring you out of a funk. Especially if you’re in an “I’m-broke-and-can’t-afford-things” holding pattern.

Change Your Backdrop: Are your surroundings feeling a bit stale? Google your area + free and see what pops up. Maybe there’s a festival or a trail you haven’t tried, or some place you can go to where you can pack snacks/a lunch and let part of your day unfold.

Focus on Gratitude: One of my favorite things to do throughout the year is to take one of those rip-away, one-a-day, calendars (the small ones that fit on your desk), and each morning ripping off yesterday’s page, turning it over, and writing three things that make me grateful. Or five. Or ten. Or perhaps just one if that’s all I can muster at the moment. Then I collect the used pages in a small bin and every six months or so I read through them. What a treasure of gratitude this creates both each day as well as during those precious sit-downs where I can see just how blessed I am.

Cash in Reward Points: Sometimes a little splurge is all it takes to put you in a grateful mindset and to feel more abundant!Tweet this! If you’ve got reward points to cash in, go ahead and treat yourself.

Compare Yourself with Others: Usually I’m hugely against this one…but it’s great to put your life into perspective. Using tools like WealthOMeter.org or GlobalRichList.com to really put your own wealth and good fortune into perspective compared with the rest of the world.

We’ve all felt lack in our lives. What are some ways that you have shifted your mindset despite what your current financial picture looked like? What are some ways you’ve made decisions from a place of lack that you later regretted because they set you up for more lack? I’d love to hear about it in the comments below!

]]>11Amandahttp://www.frugalconfessions.comhttp://www.frugalconfessions.com/?p=66432015-06-15T11:51:55Z2015-06-22T09:00:30ZSince 4th of July is smack-dab in the middle of our hot, southern summer, I’ve found that having a mixture of both outdoor and indoor activities really makes the day quite enjoyable (and more comfortable, especially with me being preggers!). And don’t worry, there are lots of options for both that are really quite affordable […]

Since 4th of July is smack-dab in the middle of our hot, southern summer, I’ve found that having a mixture of both outdoor and indoor activities really makes the day quite enjoyable (and more comfortable, especially with me being preggers!).

And don’t worry, there are lots of options for both that are really quite affordable for you and your family. Here are Inexpensive 4th of July Ideas that is enjoyable for everyone.

Find Free Fireworks + Free Celebrations Near You

Getting to view free fireworks is what makes July 4th so great. But you know what else you can often do for free? Find an outdoor celebration at your local park, county, HOA (Homeowner’s Association), or community area. Oftentimes there’s fun activities for the kids and food (our neighborhood actually splurges on free hot dogs + hamburgers for everyone). And hopefully it’s in a location that’s a natural backdrop to a local fireworks show.

Squeeze in a History Movie

One of the things that my husband and I love to do on July 4th is to watch a film about our nation’s independence. Not only does this keep the spirit of the day alive, but it also gives us a cool retreat from all of the outdoor activities (did I mention we live in summer-muggy Houston??).

Fill your Netflix queue with some great historical films such as the John Adams miniseries (HBO) or The Patriot. If you’re looking for some July 4th-themed movies, you could check out Independence Day, or Jaws (takes place leading up to July 4th weekend). Got a DVR? Search for options ahead of time so that they’re pre-recorded for you to watch anytime of the day you’d like.

Dive into a Pinterest Project

I love Pinterest (you can follow me here), and usually visit the site once a week. Something that I do that I don’t see a lot of others doing is I actually try to complete some of the fun projects and recipes I find. In fact, I’ve created a board called “Pinterest Completion Board” where I re-pin what I’ve tried along with my review of it.

I’ll bet there are a few things on your Pinterest board that you’ve been dying to get to. You can make a new recipe to take to a party, or if you are hosting your own, try several (along with other dishes you have experience making). Or how about search for “July 4th” and see what kind of cool crafts and activities come up?

Break Out the S’Mores

Whether you are hosting a party or not, s’mores are a great way to end your day of celebration. You can invite a few friends or neighbors over to your home, or just come back after watching fireworks and stretch the holiday celebration out by relaxing next to a fire. All you need is a fire pit or fireplace, sticks (it’s fun to let your guests/kids collect their own), chocolate, graham crackers and marshmallows. Finding a s’mores location with fireworks in the backdrop? Priceless.

No fires for you? Some of my favorite s’mores cheats throughout the year are Dean’s Good S’Mornings (graham crackers spread with cream cheese + nutella), and graham crackers spread with fluff + nutella. Nom nom.

No matter what you decide to do this 4th of July, be sure to relax, enjoy yourself, and spend time with the ones you love.Tweet this! That’s what it’s really all about, amiright?

]]>0Amandahttp://www.frugalconfessions.comhttp://www.frugalconfessions.com/?p=66412015-06-13T21:09:02Z2015-06-15T09:00:36ZSometimes, the money is just not physically there. Yet. It’s not that it won’t be there, but maybe you’re not getting paid for another four days, or that reimbursement you were hoping for hasn’t come through (but as soon as it does your checking account will be good to go). But until then it’s a […]

It’s not that it won’t be there, but maybe you’re not getting paid for another four days, or that reimbursement you were hoping for hasn’t come through (but as soon as it does your checking account will be good to go).

But until then it’s a bit of a stress-wad because the mortgage is due on day 3 and money from your other account to CYA checking until that paycheck comes takes 3-5 days to show up.

Ask me how I know?

Our Own Experience Money Finagling

We’ve all been there.

In fact, just this month I had something happen that made me wonder how to cut through all the time it can take to shuffle money around our various accounts.

Let me break our scenario down for you:

A freelance check in the amount of $450 that was supposed to come in the mail last month never did (turns out it got lost in the mail, so they are reissuing it). Simultaneously, Paul’s one day of overtime did not show up in his check, even though he completed it a month ago.

So we were facing a too-close-for-comfort buffer of approximately $200 in checking after the automatic withdrawal of our mortgage.

Adding a little more complexity to the matter, I had been traveling to my brother’s wedding so had not started the process of aggregating last month’s biz income (which comes into three different biz accounts) into my biz checking so that I could make one income trail into our personal checking account. Each withdraw from my two PayPal accounts takes 3-5 days (but can happen at the same time), and then another 3-5 days to get from biz checking to personal checking (so up to 10 days to get our money where we want it to go).

Whew!

You can see why I started thinking about different options for money finagling (besides taking anything from our savings, as we treat that place like a black hole). Because if there’s one thing I hate, it’s banking fees when the reason the money wasn’t there was for logistical reasons.Tweet this.

Well, that and when people don’t use their turn signals.

Options for Money Finagling

There are some options in these situations, but they might not all be great ones. So let’s take a look in case you find yourself in a similar situation:

Overlapping Withdrawals from Account to Account: To be honest, I’ve never tried this method (though I’ve thought about it). If you know it takes 3-5 days to get your money to one account, then 3-5 days to get it to another, you would overlap withdrawals on those two different accounts by a day or two and cross your fingers that it doesn’t take the full 5 days from the first account to get to the second. I think this method partially hinges on whether or not your second bank account takes “pending” as “money is technically there” in case there is a withdrawal too early from the second into the third account.

Changing Your Due Dates: Several credit cards and other places you owe money allow you to change your due date. This means you want to set a due date that is around a payday so that you’re likely to have a good buffer in your account. In a pinch, I’m not sure how long it takes to move the date (as in, can you call that month and have it changed when you’re four days away from owing the money? You’ll want to make a phone call for that kind of info).

Doing the Withdraw and Deposit Shuffle: This is for those of us who have multiple accounts at the same bank. For example, my biz and personal accounts are with Chase. You can cut a few days off of the electronic withdrawal time lapse by physically going into the bank (or an atm machine), withdrawing from one account, then turning right back around and depositing it into your other account. This usually takes less time than electronic transfers.

In the end, we were fine. I was able to get my income over from my biz account to our personal checking within six days, and not the full 10 that it could have taken. The mortgage came out three days later, and all was well. Even so, it’s good to know that there are a few options for money finagling when trying to shuffle between accounts on a deadline.

]]>0Amandahttp://www.frugalconfessions.comhttp://www.frugalconfessions.com/?p=66192015-06-08T02:41:12Z2015-06-08T09:00:11ZMy grandmother — father’s mother — passed away from pancreatic cancer when I was around five years old. And even though from time-to-time I think about her and wonder about the kind of relationship we would have had if she had lived through my teens and twenties, truth be told, I only have three specific […]

My grandmother — father’s mother — passed away from pancreatic cancer when I was around five years old.

And even though from time-to-time I think about her and wonder about the kind of relationship we would have had if she had lived through my teens and twenties, truth be told, I only have three specific memories of her.

Mom Mom and Aunt Molly

One is of the two of us in the barn together. She’s keeping me occupied by having me strip the hardened kernels of field corn and individually feed them to cows (great keep-Amanda-busy-and-out-of-Dad’s-hair-task, Mom-mom!). The second is this beautiful image I have of her in the flower garden she kept on the left side of our porch. She’s wearing a skirt, glasses, and the sun is beaming behind her so that there’s an angelic, white light radiating from her body. And the third is of me jumping up on her lap — this was around the time she died — and being told to get down because she was too weak to take it.

And then there’s the thing that I honestly will always remember the most about her: the money lesson she taught me after she had passed away.

Mom-Mom’s Good China

Our farm was the home base for the Grossman’s when I was growing up. My uncles, aunt, pop-pop, and my siblings were all raised there. So for the holidays it was assumed that everyone would come back to gather and eat the meal of whichever Grossman wife was living there at the time.

While the food changed from woman to woman — my mother was all about creamed mushrooms, my stepmother was all about creamed onions — one tradition that remained the same was using my Mom-mom’s good china during the meal.

It was housed in our buffet, an antique wooden structure made from the old pews at the church up on the hill many, many years ago. Normally it held Dad’s spare change, some papers, laundry that needed to go downstairs. But on the holidays, it morphed into this magical food buffet complete with decorations reflecting through its antiquated mirror.

Her china was special. It marked an occasion, and elevated our Easters, Thanksgivings, and Christmases in a way that ordinary plates could not.

And in my mind they were not only a sentimental treasure, but also capable of being this century’s next best find on Auction Hunters.

The Plates are ‘Actually Worthless’

One holiday we had a guest whose wealth and finery well outweighed our own. My stepmother asked this guest if she thought the plates were worth something.

The woman held a plate up and inspected both sides. While we all waited around, hot with anticipation, she finally said, “No. These were those plates given away for free in the bank promotions of the good old days. You showed up on certain days and collected all of them. They’re actually worthless.”

From a Great Disappointment Comes a Great Lesson

I was 14-year-old-headstrong mad, which means there was a bit of being shattered as well.

I was also disappointed. I thought those dishes were really worth something, like 1914-Baltimore-News-Babe-Ruth-Rookie-Card worth something (hey, a girl can dream, right?).

It took me a few days of mulling over the news to make a solid realization that’s stuck with me ever since. I didn’t care that those plates had cost my grandmother nothing but time and gas to go pick up. To me, those plates were much more valuable than any Pfaltzgraff or Waterford crystal plate money could buy.

Their value was completely and utterly disconnected from their cost (which apparently had been exactly zero dollars).

Who knows if that woman was correct about my grandmother’s beautiful china; we would need an appraiser or to do some research with the exact pattern to make that sort of conclusion. Though of course if everyone and their mothers were receiving these plates for free, then it’s likely they’ve flooded the antique market and have no real ‘value’ besides being able to eat off of them.

Years later what sticks with me is that though value and cost surely overlap sometimes, they actually have nothing to do with each other. And my highly sentimental example is not the only one to show this concept of value and cost being two completely different things.

]]>8Amandahttp://www.frugalconfessions.comhttp://www.frugalconfessions.com/?p=65622015-06-08T02:46:50Z2015-06-01T09:00:27ZHave you ever stumbled upon a rerun of Who Wants a Clean House? It’s a much more glamorous, less overwhelming version of Hoarders: Buried Alive, where experts come in to declutter a household before leaving them with a newly decorated space. One of the hosts, sassy Ms. Niecy Nash, is a no-nonsense, audacious lady with […]

Have you ever stumbled upon a rerun of Who Wants a Clean House? It’s a much more glamorous, less overwhelming version of Hoarders: Buried Alive, where experts come in to declutter a household before leaving them with a newly decorated space.

One of the hosts, sassy Ms. Niecy Nash, is a no-nonsense, audacious lady with a real knack for giving it straight to people. She attempts to keep the whole project on track, as well as provide some emotional guidance to the members of the household aimed at the root of their hoarding problems.

One particular episode I watched over a year ago caught my attention, showing very efficiently the relationship between a low bank account balance and the stuff you possess.

Spending Problems Often Manifest Physically

While staring at a bin of no less than 30 designer lotions in a girl’s bedroom — just one little corner of this lady’s over-cluttered life — Nash disapprovingly asks, “Why do you have all of these lotions?”

The young, twenty-something regurgitates marketing language we’ve all heard countless times before. “Because when I walk into the store, the more you spend, the more you save.”

Without skipping a beat, Nash replies, “Let me ask you, why did you move back into your mother’s house?”

“Because I ran out of money.”

“Ding, Ding, Ding, Ding, Ding”. Ms. Nash imitates a brash bell of harsh realization, and you can just see this new line of thinking running through this girl’s mind.

Spending Money Typically Does Not Save You Money

This is probably not a newsflash for you, but it is something that we as consumers (heck, as people) are faced with everyday from marketers and sales people alike.

How many times have you heard on a radio ad from someone offering up the newest sale, “the more you spend, the more you save!”?

Now, of course there are cases where spending money can save you money. Such as:

Purchasing something that teaches you a technique to save you money in the future, like a fundamental cooking class, a book on how to do your own oil changes, my eBooks on the Drugstore Game, etc.

If there is something you find yourself renting often, like a carpet steam cleaner because you have pets, then it might be worth it to invest in one yourself. You then save the money by it essentially ‘paying for itself’ over time and use.

But in general, walking into a store and spending more money does not yield you more savings. Tweet This!

As you look around your own home, parking lot, closet, and garage, do you notice a manifestation of your money? Has it ended up accumulating in plain sight of you instead of in a bank account? Or are you one of the “lucky” few who likes to accumulate your money in savings instead?

]]>2Amandahttp://www.frugalconfessions.comhttp://www.frugalconfessions.com/?p=65602015-06-08T02:08:36Z2015-05-25T09:00:04ZHave you been on the receiving end of a Random Act of Frugal Kindness (RAFK)? Or perhaps you’ve committed one yourself? Tweet This! Oprah introduced the concept of the Random Act of Kindness (RAK) to my family in the 90s. My then-stepmother was watching her show one day, and it was all about committing these […]

Have you been on the receiving end of a Random Act of Frugal Kindness (RAFK)? Or perhaps you’ve committed one yourself?Tweet This!

Oprah introduced the concept of the Random Act of Kindness (RAK) to my family in the 90s. My then-stepmother was watching her show one day, and it was all about committing these RAKs. She excitedly told the rest of us about it, and how she wanted us to start doing them as a family.

Then one Sunday, on one of my father’s lovely car rides where he would take us all out into the middle of nowhere and purposefully get us lost (yes, these were fun occasions), we wound up at a toll booth on I-95. Instead of paying for just our toll ticket we also paid for the driver behind us. All of us giggled and smiled at the idea along with the toll booth attendant—she could tell we were up to something. We pulled ahead a hundred yards or so and watched as the car came up to the booth and sat there for a few minutes, most likely trying to digest the fact that total strangers had paid their fare. We raced off like bandits, except that the act we had just committed was for good.

We had actually committed our first drive-by RAK!

Random Acts of {Frugal} Kindness I’ve Witnessed or Received

Lately, what’s really interesting to me are all of the Random Acts of Frugal Kindness happening. I feel like they’ve been on the rise, or perhaps I’m just paying more attention to them?

These are RAKs that don’t cost a dime, just a little bit of effort. Some of my favorites I’ve personally seen have been:

I was standing in line at a Kohl’s. A woman who was going to be leaving the country the next week had just earned $100 in free Kohl’s cash that couldn’t be used until after she left the states. So she gave it to the person in line behind her.

While walking through our local JCP store, there was a man in the center aisle who asked me if I wanted his $10/$25 coupon that he had no use for. I already had a $10/$10 one, but thanked him profusely for the kind gesture.

When I go into our CVS, I oftentimes notice a coupon or two left on the product by someone who decided not to use it or who had an extra.

Our local HEB grocery store tapes coupons to products all the time.

In the various local Facebook Groups I’m a part of, there are always people giving away valuable items for free to a “good home”.

When we rented a vacation home for four days at the beach with several other couples a few years ago, there were cupboards full of unused, non-perishable food items left by previous vacationers that were ours for the using if we’d like.

All of these simple acts have really touched me, and got me thinking about ways I can pass on the kindness to others. Some simple ideas that have come to mind are bringing in used grocery bags when I go to the $5 community yoga classes (they always need more!), passing on products that I’ve tried and didn’t work for me, and I even put one in motion just the other day when Sprinkles was giving away free cupcakes. I told a random woman shopping across the street with her two children (you should have seen the smile on her face at the free treat she could now give her kids!).

And now it’s your turn. Have you noticed Random Acts of Frugal Kindness? Anymore than usual? Have you been on the receiving end and/or the committer end? I’d love to hear your own run-ins in the comments below.